Oil prices hold steady as US signals indefinite Iran blockade

Oil prices ticked up on Friday after the United States signaled it could maintain a naval blockade of Iran indefinitely, reviving concerns about crude supply disruptions. Brent crude futures rose 9 cents to $87.16 a barrel, while US West Texas Intermediate (WTI) crude gained 4 cents to $81.29 a barrel.

The move comes after both benchmarks fell more than 2% in the previous session, paring gains from a multi-day rally. Despite the dip, prices remain on track for weekly gains of around 4%.

US Treasury Secretary Scott Bessent said Washington would ramp up economic pressure on Tehran, hinting at further measures. "Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country," he said in an interview.

The threats follow stalled ceasefire talks and continued Iranian restrictions on traffic through the Strait of Hormuz, a critical waterway that carried 20% of the world's oil before the conflict. The head of Iran's Basij paramilitary unit, Hossein Taeb, said the strait is "under the management and control of the Islamic Republic," according to semi-official media.

On Thursday evening, two vessels owned by Abu Dhabi National Oil Company were attacked while transiting the strait, with the UAE government condemning it as an Iranian attack.

However, the prospect of prolonged supply constraints was tempered this week by downgraded demand growth forecasts from OPEC and the International Energy Agency. Data also showed US crude inventories posted their largest weekly gain in over three and a half years.

"The result is a market that remains supported but struggles to break meaningfully higher while these opposing pressures remain in place," said Tim Waterer, chief market analyst at KCM.